RELEASE: $10 Billion for Federal Highways Diverted from States with High Need for Infrastructure Repair

Washington, D.C. — A new analysis from the Center for American Progress released today finds that the recently passed highway bill—formally known as the Moving Ahead for Progress in the 21st Century Act—drives nearly one-quarter of all federal highway and transit funds to states based on political objectives rather than on the relative need for road, bridge, or transit repair. When Congress passed the bill in July, it carried over previous funding formulas for highway and transit programs, failing to end costly and politically motivated funding rules that divert billions in scarce federal highway program dollars from states with the most pressing needs to states with less need.

“In response to the ‘bridge to nowhere,’ Congress eliminated the overt earmarks in the highway bill, but as this report shows, politics still trump the need for a large portion of this highway authorization bill,” said Donna Cooper, Senior Fellow at the Center for American Progress and co-author of the report.

Based on the latest data from 2010, the CAP analysis finds that slightly more than $10 billion—out of approximately $43 billion in federal highway funds—was distributed in equity bonuses and minimum payments to states that could not demonstrate sufficient need through the traditional needs-based funding formulas. The report, titled “Highway Robbery,” provides a state-by-state analysis illustrating how federal funds are being diverted from states with high infrastructure needs to states with much lower levels of need.

Specifically, the report details three obscure programs and rules that enable politics to trump infrastructure need:

The equity bonus program, a complicated and opaque formula that distributes billions of dollars without consideration of need

Minimum set-aside rules, which guarantee that certain states get funding regardless of their share of total needs

Imperfections in funding formulas, which understate certain highway and transit costs relative to each state’s need

These three problems with our surface transportation funding result in funds being cut from states with larger objective and legitimate infrastructure needs to pay for the funds these unfair formulas and rules direct to states that have much less need for this federal support.

“Without question there aren’t enough funds to go around, and our road, bridge, and transit needs are growing. That’s why its especially problematic that Congress continues to direct federal tax dollars to pay for carefully contrived set-asides intended to meet political objectives rather than the real need for infrastructure repair,” added Cooper. “Instead of continuing to siphon federal dollars from high-need states such as California, New York, and Pennsylvania to support low-need states such as Alaska, it’s time lawmakers dedicated each federal dollar to the country’s most pressing highway and transit needs.”

Since the highway bill expires in just two years, Congress has a fast-approaching opportunity to improve the surface transportation formulas with an eye toward getting the biggest bang for every federal dollar invested. The report’s authors recommend that such a bill would include the following changes in order to direct federal money where it’s needed most:

Eliminate the equity bonus program and redistribute all funds through programs with objective, needs-based formulas.

Eliminate minimum set-aside rules for all highway and transit programs.

Make permanent the recent ban on explicit transportation earmarks and preclude legislative language that acts as earmarks.

Reform needs-based formulas to better account for the cost and relative share of funding needs.